Frameworks to Secure Sustainable Critical Mineral Supply Chains
Frameworks to Secure Sustainable Critical Mineral Supply Chains
Context
Securing a stable, diversified, and sustainable supply of critical minerals is essential to support the green and digital transitions. These materials, such as rare earth elements, cobalt, and lithium, are needed for clean energy technologies, semiconductors, and electric vehicles. However, many countries remain dependent on a small number of suppliers for key inputs, creating vulnerabilities to supply disruptions, price volatility, and geopolitical risk.
To address these challenges, governments are increasingly developing comprehensive policy frameworks that combine domestic production targets, recycling commitments, and strategic partnerships with resource-rich regions.
As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, the European Union’s Critical Raw Materials Act (CRMA), is one example of a policy framework aimed at securing diversified and sustainable supplies of critical raw materials through strategic partnerships.
Challenge
The CRMA was introduced to address growing supply chain vulnerabilities and strategic dependencies.[i] It responds to the risk that many critical raw materials are sourced from limited suppliers.
- Supply chain dependence: For instance, over 90% of the EU’s rare earth element imports come from China, reflecting a high degree of dependence on a single supplier. Similarly, around 60% of the EU’s cobalt is sourced from the Democratic Republic of Congo and largely refined in China, highlighting concentration risks across multiple stages of the supply chain. [ii]
- Trade considerations: High concentration of supply chains in a limited number of countries increases the EU’s exposure to supply chain and trade-related challenges, as seen in past disruptions to lithium supply from China and cobalt from the Democratic Republic of Congo.[iii]
- Sustainability standards: Several countries supplying critical raw materials to the EU face challenges in aligning with the EU’s ESG standards, complicating the EU's efforts to source raw materials in line with its environmental and human rights standards
Approach
The CRMA provides a strategic framework to overcome these barriers by establishing resilient CRM supply chains through international partnerships. Central to this approach is the development of Strategic Partnerships, including with resource-rich regions such as the Southern African Development Community (SADC). The EU’s solution comprises five pillars[iv]:
- Diversify Supply: Reduce reliance on a few countries by building global partnerships.
- Boost EU Production: By 2030, set targets to extract (10%), process (40%), and recycle (25%) CRMs within the EU.
- Promote Sustainability: Support recycling and circular use of materials to lower environmental impact.
- Monitor Risks: Track CRM supply chains and conduct stress tests to improve resilience.
- Build Global Partnerships: Collaborate with resource-rich countries on fair, sustainable value chains.
Conditions
Efforts to ensure the success of the EU’s CRMA strategy have been enabled by:
- Clear Mandate and Strategic Alignment: A shared recognition across EU institutions of the risks posed by CRM dependency led to strong commitment, aligning the CRMA with broader industrial and climate strategies under the European Green Deal[v].
- Fast-Track Permitting and Strategic Project Designation: To overcome regulatory delays, the CRMA introduced legally binding permitting deadlines (27 months for extraction, 15 for processing/recycling) and created a special status for “Strategic Projects” that benefit from accelerated approvals and state support[vi].
- Financial Instruments and Risk Mitigation Frameworks: Investment-readiness was enabled through structured financial support, including access to InvestEU and the European Investment Bank, which co-finance and de-risk private investment in CRM value chains[vii]
- Administrative Streamlining at National Level: Member States were required to designate single contact points for CRM projects and launch national exploration programs, reducing bureaucracy and creating visibility into geological potential[viii].
- Central Coordination via the Critical Raw Materials Board: Establishing a new EU-level governance structure, the European Critical Raw Materials Board, ensured ongoing coordination, progress tracking, and alignment across Member States and external partners[ix].
Observed Impact
Since implementing the Critical Raw Materials Act (CRMA) in May 2024, the European Union has made measurable progress towards securing a sustainable and resilient supply of critical raw materials (CRMs).
- Diversification target: To reduce reliance on any single non-EU country to below 65% by 2030, the EU has launched 47 strategic CRM projects across 13 Member States and is supporting select projects in partner countries outside the EU.[x].
- Domestic capacity: To meet a projected 12-fold increase in lithium demand by 2030, the CRMA mandates that at least 10% of strategic raw materials be extracted, 40% processed, and 25% recycled within the EU[xi].
- Global partnerships: The EU has signed multiple strategic partnerships with Southern African countries such as Namibia and Angola to support local value chains and secure sustainable CRM imports[xii].
- Major projects: Projects like Romania’s Verde Magnesium aim to produce 90,000 tons annually by 2027, enough to meet 50% of the EU’s magnesium supply and contribute to the CRMA’s 10% domestic extraction target[xiii].
- Recycling push: The CRMA sets a 25% recycling target for strategic raw materials by 2030, and it is actively working to recover CRM-rich components like permanent magnets and batteries[xiv].
What’s Next for the Southern African Region
To fully capture the value of their abundant natural resources and meet regional development goals and global demand, Southern African countries could take a coordinated step forward by establishing their version of a Critical Raw Materials Framework, inspired by the EU's CRMA. Using a regional forum such as the SADC could help with this. Such an initiative could unlock industrial and economic transformation domestically. Steps to consider may include:
- Develop a Regional CRMs Strategy: Create a unified SADC policy framework for critical raw materials (CRMs), including a shared priority minerals list, coordinated permitting processes, region-wide recycling targets, and harmonized ESG standards to support sustainable and responsible development.
- Align ESG and Regulatory Standards: Harmonize environmental, social, and governance (ESG) criteria across member states to attract sustainable investment.
- Build Regional Value Chains: Invest in local refining, processing, and manufacturing to move beyond raw material exports.
- Establish a Regional Coordination Body: Create a central SADC authority to coordinate CRM policy, permitting, infrastructure, and trade facilitation.
- Leverage Strategic Partnerships: Engage the EU and other partners from a unified, value-driven position to co-develop CRM projects and infrastructure.
[i] https://eeb.org/wp-content/uploads/2024/12/Digital-Community-Guidelines-for-Strategic-Projects.pdf?
[ii] https://pie.net.pl/en/98-of-eu-demand-for-rare-earth-elements-is-met-by-china/
[iii] https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions
[v]https://www.delorscentre.eu/en/publications/eu-critical-raw-materials
[vi] https://publyon.com/critical-raw-materials-act-boosting-the-twin-green-and-digital-transition
[x] https://www.reuters.com/world/europe/eu-announces-list-47-strategic-metals-projects-2025-03-25
[xii]https://www.europarl.europa.eu/RegData/etudes/BRIE/2024/766253/EPRS_BRI%282024%29766253_EN.pdf
[xiii] https://www.ft.com/content/f77bf51f-0cae-42bf-8d9c-c11d24dac906